Can MySpace Suits Can the Spam?

Social-networking sites such as MySpace and Facebook are dropping the legal hammer on spammers. The question is: Can they really nail the elusive disturbers of Internet peace?

Last month, Facebook's lawyers at Orrick, Herrington & Sutcliffe filed a lawsuit against Adam Guerbuez, accusing the Canadian man of hijacking users' accounts, impersonating them to send more than 4 million messages in March and April that market “offensive” and “embarrassing” products such as marijuana and penis enlargement pills.

In May, MySpace won a $230 million default judgment against Sanford “Spamford” Wallace and a business partner. In June, MySpace got a $6 million settlement from Scott Richter, whose company, Media Breakaway, allegedly sent unwanted ads to users. In both cases, the social site was represented by Greenberg Traurig's Ian Ballon, who says the battle over social-network spam is still evolving: “MySpace has generated most of the law in this area.”

No Shows

But even with the staggering numbers and solid fact patterns, the Internet hangouts shouldn't be hoping to collect any judgments, Internet lawyers say. The spammers rarely show up in court and are hard to even locate.

“Do these lawsuits work in the sense of recovering monetary awards? Only occasionally,” says William Frimel, a DLA Piper litigator who works on spam cases. “I think more important to these companies is the chilling effect it has on spam.”

On some levels, it's a public relations effort, says Eric Sinrod, a Duane Morris partner in San Francisco: “It's essentially letting the world know you're tough about this and creating some deterrents.”

“I would say that my hope is that publicity from some of the recent large judgments would discourage people from this type of behavior,” Ballon agrees, but that doesn't mean he's willing to give up on the money. “The reality is that people who do this at a large scale are making a lot of money, and you can potentially collect.”

The social-networking sites aren't the first to take this tack. Earlier this decade, the Microsofts and the AOLs fought spammers with highly publicized lawsuits. AOL once raffled off a Porsche seized from a California spammer in a settlement.

The legal publicity stunts have an impact, just not always the desired one, says John Dozier Jr. of Dozier Internet Law, which represents Internet marketing companies facing spam accusations.

“I think it definitely works,” Dozier says. “Everybody knows now to move their assets off shore.”

Dozier says it's no mistake that defendants like “Spamford” Wallace, who was accused of sending ads to users made to look like messages from friends, wouldn't show up to fight the MySpace case.

“These are very sophisticated business people ' we represent them, so we know,” says Dozier, who was not involved in the MySpace case. “They've made a conscious decision that they are better off not fighting it than fighting it ' it's a very common strategy.”

Building a Case

Lawyers' weapons for fighting spammers have been federal anti-spam law, the CAN-SPAM Act and various state laws. But the social-networking sites also have something else up their sleeves that the previous generation of Internet companies didn't have.

“The one advantage a social network has is the contractual relationship it has with its users,” says Greenberg's Ballon, who represents MySpace.

To send a message through a social network, you have to be a member. When spammers sign up, they agree to terms of use that include penalties for junk e-mail. In a MySpace case against TheGlobe.com, a judge upheld a provision in the site's user agreement that says “you agree to pay MySpace.com $50 for each such unsolicited e-mail.”

Even so, plaintiffs in these cases look to the CAN-SPAM Act and state laws for damages since it's difficult to prove the injury caused by the spammers. Under CAN-SPAM, each violation can bring $100 in damages ' and triple that amount if it's done willfully.

Neel Chatterjee, the Orrick lawyer representing Facebook in its spam case, declined to comment publicly, but the lawsuit accuses Guerbuez of violating the CAN-SPAM Act as well as breach of contract.

Guerbuez, who is also associated with a now-defunct Web site hawking videos of homeless people being beaten, doesn't appear to be fighting the lawsuit. He also did not return a message seeking comment sent to his Facebook account.

Dozier predicts that the social-networking sites will drop the high-profile suits after a while, just the way Microsoft has stopped its anti-spam litigation. Next up, he says, will be microblogging sites like Twitter.

Social-networking sites such as MySpace and Facebook are dropping the legal hammer on spammers. The question is: Can they really nail the elusive disturbers of Internet peace?

Last month, Facebook's lawyers at Orrick, Herrington & Sutcliffe filed a lawsuit against Adam Guerbuez, accusing the Canadian man of hijacking users' accounts, impersonating them to send more than 4 million messages in March and April that market “offensive” and “embarrassing” products such as marijuana and penis enlargement pills.

In May, MySpace won a $230 million default judgment against Sanford “Spamford” Wallace and a business partner. In June, MySpace got a $6 million settlement from Scott Richter, whose company, Media Breakaway, allegedly sent unwanted ads to users. In both cases, the social site was represented by Greenberg Traurig's Ian Ballon, who says the battle over social-network spam is still evolving: “MySpace has generated most of the law in this area.”

No Shows

But even with the staggering numbers and solid fact patterns, the Internet hangouts shouldn't be hoping to collect any judgments, Internet lawyers say. The spammers rarely show up in court and are hard to even locate.

“Do these lawsuits work in the sense of recovering monetary awards? Only occasionally,” says William Frimel, a DLA Piper litigator who works on spam cases. “I think more important to these companies is the chilling effect it has on spam.”

On some levels, it's a public relations effort, says Eric Sinrod, a Duane Morris partner in San Francisco: “It's essentially letting the world know you're tough about this and creating some deterrents.”

“I would say that my hope is that publicity from some of the recent large judgments would discourage people from this type of behavior,” Ballon agrees, but that doesn't mean he's willing to give up on the money. “The reality is that people who do this at a large scale are making a lot of money, and you can potentially collect.”

The social-networking sites aren't the first to take this tack. Earlier this decade, the Microsofts and the AOLs fought spammers with highly publicized lawsuits. AOL once raffled off a Porsche seized from a California spammer in a settlement.

The legal publicity stunts have an impact, just not always the desired one, says John Dozier Jr. of Dozier Internet Law, which represents Internet marketing companies facing spam accusations.

“I think it definitely works,” Dozier says. “Everybody knows now to move their assets off shore.”

Dozier says it's no mistake that defendants like “Spamford” Wallace, who was accused of sending ads to users made to look like messages from friends, wouldn't show up to fight the MySpace case.

“These are very sophisticated business people ' we represent them, so we know,” says Dozier, who was not involved in the MySpace case. “They've made a conscious decision that they are better off not fighting it than fighting it ' it's a very common strategy.”

Building a Case

Lawyers' weapons for fighting spammers have been federal anti-spam law, the CAN-SPAM Act and various state laws. But the social-networking sites also have something else up their sleeves that the previous generation of Internet companies didn't have.

“The one advantage a social network has is the contractual relationship it has with its users,” says Greenberg's Ballon, who represents MySpace.

To send a message through a social network, you have to be a member. When spammers sign up, they agree to terms of use that include penalties for junk e-mail. In a MySpace case against TheGlobe.com, a judge upheld a provision in the site's user agreement that says “you agree to pay MySpace.com $50 for each such unsolicited e-mail.”

Even so, plaintiffs in these cases look to the CAN-SPAM Act and state laws for damages since it's difficult to prove the injury caused by the spammers. Under CAN-SPAM, each violation can bring $100 in damages ' and triple that amount if it's done willfully.

Neel Chatterjee, the Orrick lawyer representing Facebook in its spam case, declined to comment publicly, but the lawsuit accuses Guerbuez of violating the CAN-SPAM Act as well as breach of contract.

Guerbuez, who is also associated with a now-defunct Web site hawking videos of homeless people being beaten, doesn't appear to be fighting the lawsuit. He also did not return a message seeking comment sent to his Facebook account.

Dozier predicts that the social-networking sites will drop the high-profile suits after a while, just the way Microsoft has stopped its anti-spam litigation. Next up, he says, will be microblogging sites like Twitter.